Parking tickets are a hot topic for anyone who lives in a city. Personally I averaged at least a ticket a month in San Francisco, which adds up to approximately $1,000 every year. I always contested my parking ticket, because I believe that the parking ticket system is a racket run by the city to extract revenues from the citizens. A friend asked me how to contest tickets one day and they gave me the idea of an iPhone app to contest people's parking ticket.
We initially built a fake web page to see if anyone else thought this was a good idea, and that fake landing page got so much traction and hype that within the first week, we had 20,000 people signed up for our wait list, and then NPR called us for an interview and then CNN put us on their homepage the next week.
So at that point, we knew we were onto something. The next step was adding a layer of technology to the ancient system of contesting one’s tickets.
Fixed takes the ancient process of contesting tickets in person and automates it with technology. We built a rigorous system that checks tickets for issues or errors that make them invalid, and then submits a contest letter to the city on the user's behalf.
It starts with a photograph of the ticket, which then gets transcribed by a Mechanical Turk into hard data for the computer. Based on that data, we check the city it was issued in, the issue date, and the violation code (street cleaning versus parking meter, etc). Based on that violation code, we have a list of issues and errors that make that ticket invalid. The errors can be trivial like missing information on the ticket, like license number, typos, make of the vehicle, etc. If we can’t find trivial errors we do more research including a remote site search of the parking location using Google street view to check if there is a sign within 100 feet of the issue location. Based on the entire error report our team in San Francisco constructs the user’s contest letter and then automatically submits the letter on the user’s behalf. Four weeks later we get a verdict.
If you find a ticket on your windshield all you have to do is take a photo of the ticket, click ‘submit’ on the Fixed app and wait four weeks. If we beat it you save 65% of the fine and if not we use your credit card information to pay the ticket for you. For most users it’s just easier to pay for tickets through the Fixed app rather than use the clunky city website.
Yeah, we have our name on everything and no individual produces such comprehensive and substantial legal documents for a parking violation like we do.
We win 20-25% of the tickets we contest.
At the offset, it used to take us 40 minutes to contest a parking ticket. Someone here in San Francisco used to handle everything manually. It was time consuming and costly. After almost 60,000 tickets we understand every step in the process and have been able to systematize more and more of it. What used to take 40 minutes now takes only two minutes. We now process 1,700 tickets per week with our automated system.
It used to cost us maybe $15, to process and contest every ticket. Now it costs us $2 to contest each ticket and we make ~$1-2 from every ticket.
We first figured out where the majority of tickets stemmed from so we could focus our efforts. Every city has 100 different parking violations, but the top ten violations account for 90% of all the tickets people get. By focusing on these top ten violations we were able to systematize the problems for 90% of our users. We’ve used San Francisco to build a canonical framework of parking violations, which makes it easy to enter any new city because all we have to do is swap out the violation codes. We’re actually able to get up and running in a new city in about three or four days.
There is so much noise in the market, so many solutions for so many problems. We knew we needed something that rose above the noise, that users told their friends about to have a model that resulted in cost effective user acquisition. We’ve been fortunate to have a product that people love to talk about.
Parking tickets resonate with everyone; we’ve all felt the pain of losing 70 bucks for something that never seems to be our fault. There is a sense of injustice no matter the situation – it’s an emotional issue for most people. And people share solutions to emotional problems like this. From day one, people shared the website way more than we thought they would. When we released the iPhone app, over a third of the users were sharing it on Facebook. And we’ve always had a really strong word of mouth component.
In addition to the natural word-of-mouth marketing, we've figured out a pretty innovative way to acquire users. We follow the street cleaning vehicles on their routes each day and when the officers give a ticket to someone, we put on a flyer on that car to tell them about Fixed. We affectionately call our street team "our ticket heroes" because they were the first responders to that ticket injustice. We've gotten so good at this, that we know the route that every street cleaning vehicle drives. We’re able to acquire new users for ~$7 via flyering, and that number drops to ~$5 because of the resonant word-of-mouth component.
The longer-term vision is solving a variety of legal issues with technology, but parking tickets is where we’ve started because it’s such an emotional pain that resonates with everyone. We’ve figured out a way to acquire clients for much less than any other legal firm or service on the market.
We plan to expand to the top 20 cities in the US by this time next year. That will give us a foothold in the 20 largest markets in the US to begin rolling out other services like moving violations, camera tickets, and all sorts of legal services outside of driving violations.
One, mobile phones are ubiquitous enough to support our system. But more than anything we understand just how easy this must be for user adoption. Most people just want to pay and be over it, and we make it super easy for them to do that.
Also, the plethora of third party services available these days like Mechanical Turk that integrate with our back-end system made it super cheap to get Fixed off the ground. We can seamlessly integrate both technology and services from anywhere in the world to process the tickets.
When a user submits their first ticket, it includes their license plate. Every night we cross-reference our database of license plates against the city’s website to see if any existing users received a second ticket that day. We send every ticketed user an email alerting them to their ticket with a button to contest it right in the email. With this system 70% of our users use us for all their tickets going forward.
30% don’t contest their second ticket with Fixed, which happens for a number of reasons. Some are fix-it tickets for license plate issues. Some are repeat issues and users don’t think we can win if we didn’t solve it the first time. Some want to avoid the convenience fee. And even though we do win almost 30% of contested tickets, some users never win which is disheartening and sometimes results in churn.
We use an OKR framework to set concrete objectives and plan for key results. Every quarter we set a new #1 goal. For instance in early 2015 our goal was $1 profitability from every ticket. Which results in many sub-goals, like lowering costs, increasing the speed of our advocates so they could contest 16 tickets per hour rather than just 7. By optimizing a few key processes we were able to increase tickets per hour to 24 which resulted in much lower costs and $1 profitability by the end of the quarter.
We’ve set up our culture to target one really important goal every quarter that will shift the company forward significantly. After successfully tackling profitability we set out to grow the number of tickets we process. Growing meant a number of sub-goals like new cities (LA and New York), increase flyering efforts to be present on 50% of all street-cleaning tickets every day in San Francisco and LA, and increasing retention via new products like Ticket Guardian which automates the ticket submission process. Every day we do a stand up to figure out how everyone is working to meet our one number. We succeeded in growing ticket volume by 31% month-over-month since January.
We’ve pivoted our goal in Q3 to focus on demand side by expanding our offerings to moving violations and traffic tickets. Then once we have more offerings Q4 will be to blow out all of California as quickly as we can.
We estimate that across the US there are ~$5 billion in parking tickets issued every year. We capture approx. 9% of each ticket we process, which means our total market for parking tickets in the US is $250 to $450 million.
Traffic tickets are the next vertical because it’s such an intuitive segues for our users. A lot of them can’t distinguish between parking tickets and traffic tickets and they already send us their traffic tickets. We get a bunch of speeding tickets and red light camera tickets, which we’ve had to decline up until now. But as of today we are actually able to accept all sorts of moving violations like speeding and red light tickets.
The users have two buttons now, one for parking and another for traffic tickets. For traffic tickets they still take a photograph of the ticket, and then we ask them a few very simple yes/no questions. From there we make a recommendation on the next steps, sometimes it’s best to just pay and take traffic school. We will start administering our own traffic school within the next few months, and we also struck a deal with an attorney here in the Bay Area that will contest user tickets for them in court for $150. At that price it’s kind of a no-brainer to contest because down that road most moving violations in California are super expensive, not only do you pay the upfront cost of the ticket but every point on your license is ~$600 in insurance premiums over three years. For $150 our attorney will get the points removed 90% of the time, and the fine removed 60% of the time.
We see traffic tickets as a very nice and lucrative market. In the US there are about 90 million moving violations issued every year, with an average fine of ~$350, plus traffic school (~$30), plus the insurance hit (~$600). We can capture ~$40 for every moving violation we handle, and at 90 million every year the market potential is pretty big; our total addressable market just for moving violations is at least $2 billion.
Most attorneys advertise for new business, spending a fortune on billboards or Google ads. Traffic attorneys pay $8 per click on Google, while DUI attorneys pay $100 per click. They pay so much because it’s the only way for them to acquire new clients.
We are building a terrific brand around parking tickets, which will allow us to ladder up our users to our traffic ticket services and acquire clients for our partner attorneys for a fraction of what they typically pay. All of a sudden Fixed is the best way for these attorneys to find new business, which puts us in a incredible bargaining position when we expand to new markets.
There are a couple of people who have come in to the parking ticket space, startups that launched in cities before us. But once we launched we kind of blitzed them out of the water. At this point we don’t see any real competition in the parking ticket space, we’ve done a great job building the parking ticket brand.
We’ve been very diligent about painting ourselves as fighting the cities. I think people see the SFMTA and the city of Los Angeles as the bad guy when it comes to issuing parking tickets so we have always try to bill ourselves as the underdog/hero kind of fighting those evil government entities.
If we can build a brand around fighting the man, and fighting for the justice of the regular people we’ll have a winning story that sells in addition to the convenience of the technology. All our competition seems super spammy, legal ads are all the same, and other ticket contesting sites look dodgy, e.g. ticketsniper.com. They’re just not something most people can relate to. But we want to position ourselves as the trusted brand that fights for the people and has their best interest in mind even if we can’t win the individual ticket. Fixed will be the trusted expert for all sorts of legal processes beyond automobile tickets. We’ll provide the best most economical solution even if it doesn’t include revenue for us, because that trust is the only way Fixed will be the first stop everyone makes when they get into legal trouble.
The consumer legal market is about $100 billion in the US right now. That's split between what I call vitamin legal actions and painkiller legal actions. Vitamin legal actions are things that one consciously does to better their situation, e.g. write a will or establish a trust for the kids. Painkiller legal actions are ones you don’t expect that deteriorate your situation: parking tickets, speeding tickets, other city fines, debt, delinquency notices, minor tax issues, other government issues, deposits not refunded.
These are always unexpected, and the first thing everyone does is try and figure out what it means and how to handle the situation. We think Fixed can be that first stop to figure it all out. Anytime a user gets a letter with bad news, they snap a photo, it comes into our system where we process it automatically and tell them exactly what their options are.
Some of the markets we see right away are: denial of health insurance claims, denial of insurance claims, denial of social security, DUIs, bankruptcy, home foreclosure, criminal charges, wrongful terminations, tax issues, maybe immigration, maybe even divorce papers are filed against you.
Fixed will be the first step to solving all these issues. We will be the portal through which the $100 billion consumer legal services market takes the first step. It’s a new market we’re creating and it’s really ours to own.
Right now we’re heads down on rolling out our traffic ticket MPV in San Francisco.Q4 is to take that product and blow out California and New York as well. In Q1 of next year we’ll open up the platform a little bit more and start taking in more general legal questions from users. It will be hard to jump from a trusted parking ticket solution to a trusted DUI solution, but we will make this jump in steps: from basic violations like parking to traffic violations then insurance claims and then into more sensitive cases like DUIs. Starting early next year we’ll open the platform up and handle as many cases as possible. Then once we’ve built that trust and demonstrated that users will use Fixed for more than just parking tickets we’ll raise our Series A.
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